The existence of positive economic profits in an industry attracts new entrants into the industry.
Answer the following statement true (T) or false (F)
True
In the long run, firms will enter an industry as long as they can earn a greater than normal (zero) profit.
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Suppose an executive has a choice between two salary compensation packages. One guarantees him an income of $250,000 a year
The other would give allow him to earn an extra $50,000 a year if profits rise by 2% but receive a pay cut of $50,000 f they don't. Let's assume that there is a 50% chance that the profits could rise by 2% or more and a 50% chance that they won't. Explain why he might accept the $250,000 guaranteed salary. What would have to be true for him to accept the second salary compensation package?
Refer to Table 9-11. Prior to trade, what was the opportunity cost to produce 1 hat in Belize?
A) 1/2 of a clock B) 2/3 of a clock C) 1.5 clocks D) 2 clocks